Adverse Possession 2

In terms of adverse possession. One of the rationales supporting adverse possession doctrine is that adverse possession is a legal tool one can use to encourage economic development. [1] Sprankling tells us that adverse possession allows the “industrious squatter” to have the title of real property reallocated to him, where he would then commence in the productive use of the land. [2] Perhaps this rationale had some relevance when the country was young and there was so much vacant and cheaply priced land. Where, because of this abundance of land, there was a struggle to establish and sustain communities. But today, there are other important aspects to consider. One particular aspect presents a viable argument against the economic development rationale supporting adverse possession of foreclosed properties. While the buyer could not afford to keep up with mortgage payments, the property itself was always in a state where it promoted economic development simply because it was the collateral which secured the interest-bearing loan.  If the buyer defaulted on the loan, the lender, during the course of his regular business practice, would seize and liquidate the property. Because of this practice, it seems questionable to allow a party with a minor stake in the property (such as the squatter who paid $16 to file an adverse possession claim on a $330K property) to be able to interrupt the already engaged promotion of economic development by parties who could be at risk of losing $330K, with the rationale that allowing adverse possession would promote economic development.

[1] John G. Sprankling & Raymond R. Coletta, Property: a contemporary approach 98 (3rd ed. 2015).

[2] Id.

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